The Dominican Republic and Honduras both appealed a Panel Report that came after Honduras challenged the Dominican Republic's general measures relating to the import and sale of imported cigarettes. The Dominican Republic contended that the Panel erred in finding that its tax stamp requirement was not justified, and Honduras contended that the Panel erred in finding that the Dominican Republic's bond requirement does not accord less favorable treatment to imported cigarettes than to domestic products. The Appellate Body upheld the Panel Report's decision on both issues.
Honduras challenged the Dominican Republic's general measures relating to import and sale of imported cigarettes, including a stamp requirement, import surcharges, foreign exchange fees, a consumption tax, and a bond requirement. A WTO Panel found that the stamp requirement, the transitional surcharge, the foreign exchange fee, and the selective consumption tax each violated international trade law. However, the Panel found that Honduras did not demonstrate that the bond requirement imposed on cigarette importers violates international trade law.